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Nedbank has released its financial results for the six months ending June 2025, revealing a modest performance amid a challenging global and domestic economic environment. While the bank managed to grow its net interest income and declared an interim dividend, its profitability was impacted by a subdued economic climate. Looking forward, Nedbank anticipates a moderate improvement in banking conditions but has revised its full-year guidance, citing external pressures and strategic changes.
● Net interest income: R21.2 billion, a 2% increase from R20.8 billion in the prior period.
● Total net income: R33.7 billion, an 8% increase from R31.1 billion.
● Profit attributable to ordinary shareholders: R7.3 billion, a 7% decrease from R7.9 billion.
● Headline earnings per share (HEPS): R18 per share, a 6% increase from R16.99 per share.
● Dividend: A dividend of R10.28 per ordinary share has been declared.
Nedbank’s share price is down more than 17% year-to-date, currently trading below a key technical support at R237.80, and reflecting market caution due to mixed economic challenges. Management’s outlook for the remainder of 2025 is cautiously optimistic, forecasting a modest South African GDP recovery to 1% in 2025 and 1.5% in 2026, supported by lower inflation and July’s 0.25% rate cut. However, external pressures, the newly imposed 30% US tariffs on local exports and slowing global growth, pose risks to business confidence and private investment. In line with these challenges and strategic adjustments related to its Ecobank holdings, Nedbank has an expected ROE of around 15%. Longer term, the bank remains committed to lifting ROE to 17% in the medium term and above 18% over time, with growth initiatives and disciplined capital allocation forming the backbone of this strategy.
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
